8/03/2009 @ 5:45PM

Partnership, Not Patronage

Just three weeks after President Barack Obama’s triumphant return from Africa, the real challenge to achieving strategic change lies in Secretary of State Hillary Clinton’s own upcoming visit. Left unsaid as the president boarded Air Force One is the fact that Africa seeks not patrons but collaborators who will work “with” rather than “for” the continent. If the Obama administration wishes to truly make a difference, it must do so as an equal partner, addressing several low-cost, high-impact priorities.

To start, developed partner countries must curb corruption abroad. Efforts by African governments to strengthen democracy and governance are weakened if money stolen from the continent can find safe havens in secret accounts in the West. Chillingly, major OECD countries have yet to prosecute a single defendant for fraudulent and corrupt practices overseas. Poorly enforced international covenants won’t deter collusion and bid-rigging in large African infrastructure contracts.

Economic equations need to change as well. Since 1970, Africa’s share of global exports has declined from 3.5% to 1.5%. To reduce poverty and sustain growth, Africa must reverse this decline. Secretary Clinton has an opportunity to secure a quick win while in Nairobi, Kenya, for the Africa Growth and Opportunities Act forum this month. Expanding AGOA–the showpiece of America’s trading relationship with Africa–to include a larger number of agricultural and processed commodities will help. But if Clinton does not address U.S. agricultural trade subsidies that distort the forces of the marketplace AGOA will never realize its potential–nor will Africa be able to trade its way out of poverty.

The global recession has hurt Africa. The surge in private capital flows to the continent, driven by efficiency gains from policy improvements, has helped fund badly needed infrastructure development. Since the economic crisis, however, these private flows–which topped $53 billion in 2007, exceeding foreign assistance for the first time–have fallen by 40%. There remains an annual $40 billion infrastructure financing shortfall.

The deficit can be quickly addressed by catalyzing private partnerships to raise equity finance and by increasing funding to companies that want to invest. In addition, only a quarter of Africa’s population has access to electricity. Public-private investments in hydropower would offer a carbon-neutral solution.

Loan guarantees by the U.S. Export-Import Bank for American firms wishing to invest in Africa amounted to $400 million in 2007. That year, China’s Export-Import Bank guaranteed loans of $13 billion to Chinese firms investing in Africa. Closing this gap would do much to project Africa as an investment-grade destination.

In extractive industries, U.S. companies should be encouraged to change the practice of building extensive private rail, power and port assets that remain detached from the host country’s often sparse infrastructure network.

Ultimately, Africa’s quality of life will depend on the health of its citizens. The centerpiece of U.S. support for HIV/AIDS in Africa–the President’s Emergency Plan for AIDS Relief–has helped expand life-saving treatment. President Obama has an opportunity to make PEPFAR more effective by moving from emergency to long-term support–as in the Millennium Challenge Corporation’s five-year partnership model, with each country taking ownership of the design of its programs.

Finally, we need more effective and predictable development lending. The U.S. remains the main exception to the common donor practice of channeling development assistance through financial systems of recipient countries. Done with sufficient safeguards, this strengthens country ownership, responsibility and accountability. The U.S.’s reluctance to embrace shared multilateral approaches limits the impact of its foreign assistance.

President Obama’s charisma, oratory and heritage have excited Africa as never before. Now substantive action that realizes the promise of his visit needs to be on Secretary Clinton’s agenda during her visit to seven African countries.

Ellen Johnson-Sirleaf is president of Liberia; Paul Kagame is president of Rwanda; Seretse Khama Ian Khama is president of Botswana; and Abdoulaye Wade is president of Senegal.